A couple of weeks ago, my oldest son and I were sitting on the back deck reading – me an investing book, him an article on personal finance from maybe the Globe and Mail or the Financial Post.
He was horrified at the spending habits of the person profiled in the article he was reading. Here’s what I recall about her situation:
- divorced a few years, teenage daughter, shared custody with the ex
- settlement of ~ $225k or so from the divorce – all gone
- earns $100k/year, 0 savings, debt of ~ $40k over and above mortgage – which was a very high balance so must have been refinanced when housing prices were much higher than now
- lives in $600k house (I think median prices in her city are ~ $350k) – probably a left over from the divorce
- spends ~ $7,500/month (about $1-$1.5k more than take-home pay)
In general, her spending was the usual “OMG how can you spend that much?!?” kinds of things. Lots to pass judgement on and easy to trim anyway.
My son’s solutions for her dilemma were way more draconian than either my or the financial planner’s solutions. And of course, like any 24 y.o. single male that lives in his mother’s basement, he didn’t factor in minor things like paying for anything for the teenage kid, higher taxes or utilities… But I can’t judge her because the reason why she was profiled was because she knew she had to change.
I earn more (right now) on my own than any of the 1% SINKS and double income-ers profiled in this Toronto Life article. Unlike most of them, my expenses are quite a bit lower and my savings quite a bit higher. Whatever. Apparently my not-spending habits are difficult to change. But I admit, I didn’t try that hard. It seemed like too much work.
So I really don’t see why John Scalzi on his blog “Whatever” wants to rip the profiled people a new one in his post: Not being able to scrape by with $200k is usually your own fault
Apart from the one couple that is saving nothing and complains that they can’t and one single guy that complains a bit about taxes (hmm… that sounds familiar…), they’re all living below their means and saving for the future. Even the 80 year old couple in the article LBYM’s – apart from a new car every 3 years, their base living costs are only $30k/year + what they spend traveling of another $30k. But they’re called out of touch assholes by Gawker. (Well gee, how do you think they got that money? By working hard and saving for a LONG time or winning the lottery?)
Like the octogenarians, I really like buying stocks on sale. The sheer pleasure of playing around in the stock market just might be enough to keep me working… Mark Cuban or index investors might think that’s like a gambling addiction – and maybe it is. Don’t judge me!
Judging – is it really that bad? It’s just social comparison theory isn’t it? Sometimes we judge and approve – and sometimes we judge and disapprove. But we’re always judging, comparing and refining. Like I look at the octogenarian’s lives and think they have quite an ideal lifestyle that I’d like to have some day. I think comparing is a valuable thing for young people like my son to do but once you’re over 40 or so you just stop caring what other people do or what they think about what you do. Maybe Scalzi’s under 40.
Some things I’ve read but have no idea who they’re attributable to:
When we’re in our 20′s we think everyone thinks about us. In our 30′s we don’t care if they think about us. And in our 40′s we know that no one was thinking about us.
Most people think more about what they’re having for dinner than they do about you.